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  • echo2165 echo2165 Jan 16, 2013 9:09 AM Flag

    Economic Lies...


    For those of you not intoxicated with imaginary elixirs: I’ll not only source, but give proud endorsement of Robert Reich’s editorial of 2011. This debate, which has repeatedly kicked down the road, isn’t going away. So have at it, kids.

    Former Sec. of Labor Reich, who has served in three different administrations, was ranked 6th on The Wall St. Journal’s list of the most “influential business thinkers” of 2008. He wrote this back in 2011.

    Sometimes, after you grow up, you realize...not unlike myths, tooth fairies, Tonkin Gulf, superstitions, yellow-cake and Santa, many of the things you were told to believe, are utter nonsense, designed to serve the special interests of a select few.

    The Seven Biggest Economic Lies: (courtesy of Robert Reich)

    “1. Tax cuts for the rich trickle down to everyone else. Baloney. Ronald Reagan and George W. Bush both sliced taxes on the rich and what happened? Most Americans' wages (measured by the real median wage) began flattening under Reagan and has dropped since George W. Bush. Trickle-down economics is a cruel joke.

    2. Higher taxes on the rich would hurt the economy and slow job growth. False. From the end of World War II until 1981, the richest Americans faced a top marginal tax rate of 70 percent or above. Under Dwight Eisenhower it was 91 percent. Even after all deductions and credits, the top taxes on the very rich were far higher than they've been since. Yet the economy grew faster during those years than it has since. (Don't believe small businesses would be hurt by a higher marginal tax; fewer than 2 percent of small business owners are in the highest tax bracket.)

    3. Shrinking government generates more jobs. Wrong again. It means fewer government workers -- everyone from teachers, fire fighters, police officers, and social workers at the state and local levels to safety inspectors and military personnel at the federal. And fewer government contractors, who would employ fewer private-sector workers. According to Moody's economist Mark Zandi (a campaign advisor to John McCain), the $61 billion in spending cuts proposed by the House GOP will cost the economy 700,000 jobs this year and next.

    4. Cutting the budget deficit now is more important than boosting the economy. Untrue. With so many Americans out of work, budget cuts now will shrink the economy. They'll increase unemployment and reduce tax revenues. That will worsen the ratio of the debt to the total economy. The first priority must be getting jobs and growth back by boosting the economy. Only then, when jobs and growth are returning vigorously, should we turn to cutting the deficit.

    5. Medicare and Medicaid are the major drivers of budget deficits. Wrong. Medicare and Medicaid spending is rising quickly, to be sure. But that's because the nation's health-care costs are rising so fast. One of the best ways of slowing these costs is to use Medicare and Medicaid's bargaining power over drug companies and hospitals to reduce costs, and to move from a fee-for-service system to a fee-for-healthy outcomes system. And since Medicare has far lower administrative costs than private health insurers, we should make Medicare available to everyone.

    6. Social Security is a Ponzi scheme. Don't believe it. Social Security is solvent for the next 26 years. It could be solvent for the next century if we raised the ceiling on income subject to the Social Security payroll tax. That ceiling is now $106,800.

    #$%$ unfair that lower-income Americans don't pay income tax. Wrong. There's nothing unfair about it. Lower-income Americans pay out a larger share of their paychecks in payroll taxes, sales taxes, user fees, and tolls than everyone else.

    Demagogues through history have known that big lies, repeated often enough, start being believed -- unless they're rebutted. These seven economic whoppers are just plain wrong. Make sure you know the truth -- and spread it on.” – Robert Reich

    Please remember, that contrary to what the one percent would have you believe, we are all in this together.

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    • 1. & 2. Our system of taxation is backward. We should be taxing consumption instead of production.
      3. Shrinking Government creates more PRODUCTIVE jobs. Government is not only inefficient, it gets in the way of private enterprise.
      4. Cutting the budget deficit now is more important than boosting the economy. If we don't stop spending 150% of our income there won't be any economy at all.
      5. Medicare and Medicaid were poor ideas instituted to buy votes. You can't reduce medical cost by adding bureaucracy cost.
      6. Social Security, another program instituted to buy votes, should be phased out.
      7. The "earned income credit" makes the tax system into a welfare system. It should be discontinued. I am a tax preparer and suspect some of my clients of fraud in order to get the maximum EIC.
      Demagogues through history have known that big lies, repeated often enough, start being believed even if they're rebutted. Our current President has mastered the technique.

      • 3 Replies to wilkes71
      • You were just reborn and the year is 1920. Hoover was proven wrong in 1930.
        How was Social Security proven wrong? How was Medicare proven wrong. I guess you like the Hoover days of grandmaw living in the back room until she dies penniless or if she gets sick she can either take care of herself or die.
        By the way, I think we already tax consumption: it is called sales tax or do you somehow don't pay it. It typically runs around 7%-9%; gas taxes are even higher.
        You know nothing.

      • "5. Medicare and Medicaid were poor ideas instituted to buy votes. You can't reduce medical cost by adding bureaucracy cost."

        Except that Medicare and Medicaid are the most efficient insurance entities in the country. Medicare spends about 5-6% on administrative costs. The average for private health insurance companies is about 12%, with ranges from 7% to 30% depending on the market.

        Worldwide single-payer systems are far, far more efficient than what we have in America and achieve similar outcomes. Healthcare is a unique market. It's not like you have a heart attack and think "now which physician produces bypass surgeries most efficiently". You want the best no matter the cost and if you can't afford it you think its morally wrong that you should die while someone who sold his soul to Goldman Sachs should live.

      • When you tax consumption in place of income and/or production you reduce consumption and thereby reduce production, jobs, and the opportunity to EARN wealth. We have far too many today that do not and don’t want to EARN their wealth.

        The government understands that through control of the money, they control the lives of individuals. That is the goal. The contention that less government will narrow the job market and suffocate the economy is just flat out dishonest. As long as government is as far-reaching and controlling as it has become, there can be no 'efficient' government.

        When health insurance is made to be truly competitive business and without government intervention, it will become more cost effective.

    • Oh mean this guy?
      "In 1996, between Clinton's re-election and second inauguration, Reich decided to leave the department to spend more time with his sons, then in their teen years. He published his experiences working for the Clinton administration in Locked in the Cabinet. After publication of the book, Reich received criticism for embellishing events with invented dialogue. The paperback release of the memoir revised or omitted the inventions."

      • 2 Replies to ciscokid_1st
      • ...

        “Oh mean this guy? ‘…After publication of the book, Reich received criticism for embellishing events’…”

        Yeah, CK, that’s the guy. The guy who wrote 13 other books in addition to this one, which pis#ed off a lot of people. Yeah, the same guy who said this in the book you reference:

        ‘If any of those with whom I rubbed shoulders, who are described in any of the following pages, feel ill-served by my account, I can only offer my apologies. I claim no higher truth than my own perceptions. This is how I lived it. This is what I learned.”

        And let me ask you, who do you think might have criticized him because of things he said, like these?: (quoted from the book):

        “For twelve years, the Republicans have perfected a strategy to shrink the size of the federal government. They could never have taken on public spending directly; too many of the programs were too popular. So they concocted a different plan: First, they cut taxes. They told the public that tax cuts would inspire so much entrepreneurial zeal that they would more than pay for themselves in new tax revenues. When that didn’t happen and the budget deficit ballooned, they changed the tune. They expressed outrage at fiscal irresponsibility. They called for massive deficit reductions. They talked about the importance of balancing the budget.”

        And this:

        “They don’t believe there should be any government except for national defense…They think all we need as a nation is a big military and a few billionaire entrepreneurs.”

        Or this:

        “Wall Street is the largest legalized gambling operation in the world.”

        Of course he received criticism from some people. That’s politics. He also criticized Clinton’s repeal of Glass-Steagal, so he’s an equal opportunity pis#er-offer, so to speak.

        And your point relative to his editorial that I posted was what, exactly? That Robert Reich is of dubious moral character because you found a criticism on Wikipedia of one of his books, but David Koresh is okay in your book? I know you didn’t say that, but your own criticism is always very selective.

        Hey, I could understand feelings about Reich something like, “Well, unless he can prove that he can consistently drain the 3’s from outside, I don’t think I want him on my hoops team.” That, I get. But criticizing a brilliant guy like this, and letting “Ubangi-lips” nonsense slide, is beneath you, I would hope. Or, maybe not.

        Enjoy your day.

      • Seriously? You can't argue with the statement, so you attempt some character assassination. All you can come up with dramatic embellishment in his memoirs from 1996?

        Read the source for your Wikipedia quote. It's citation 14 or Search: "Now! Read the True (More or Less) Story!; Publishers and Authors Debate the Boundaries Of Nonfiction"

        What a shame that this is what conservative thinking has been reduced to.

    • Most economics is pure BS. You and others NEVER mention the privately owned "Fed" which has a monopoly on the issue of interest bearing currency. (For them). Reich is part of the cabal behind this racket.

    • Exactly. I'd add one more: That infrastructure, safety net and Federal employee pay are the main drivers of government spending. They are not. Medicare, Soc. Sec. & Defense are the main drivers of government spending.

    • So your answer is to continue to spend and tax our way to prosperity? How has that worked over the past four years?

      The deficit and our debt are higher than it has ever been and even the people causing it forecast it to go even higher. Unemployment is for all practical purposes, unchanged and the dead beats in Washington are still leaderless and worthless.

      How's that change and hope working? Why is it that you and your favorite President are still hoping that it works while all the statistics indicate otherwise?

    • True, partially. health care costs, premiums paid for same. Will likely double next year. Why? 30 million new patients will flood our healthcare system under OhBama care. This doesn't even include the illegal aliens. NOTE:WE CAN'T AFFORD CITIZENSHIP FOR 40 MILLION ILLEGALS. Call every elected official you know, NOW. The Republicans will cave. You can bet on it. If you are young, and ever want a job, get out of Moma's basement. Act today!! If illegals get citizenship, we will become the largest 3rd world country in the world.

    • Two good old boys were walking down the street when one says, "Geez! How cold is it."

      The other fellow responds, "It is so darn cold that I actually saw a Democrat with his hands in his own pockets."

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